HP Attacks Backlogs

New U.S. sales leader pledges full channel support in his strategies

With partners unsettled by recent logistics missteps, Hewlett-Packard's new top U.S. sales executive last week pledged to reinvigorate its channel with "maniacal execution."

"We have work to do to regain the hearts and minds of our channel partners," said Jack Novia, the new senior vice president and managing director for Americas region of HP's Customer Solutions Group (CSG). "My goal is to get our company in a position where we are the preferred vendor to do business with."

Novia, who was in strategy meetings last week in Houston with his new team, got the top U.S. job after his predecessor, Jim Milton, and CSG Executive Vice President Peter Blackmore were fired in the wake of a $208 million operating loss in the enterprise server and storage business.

Novia said "priority one" is to get past any backlog issues created by HP's move to a new SAP order-processing system. He added that he is fully committed to removing any and all roadblocks hampering channel partners and stressed that no business unit plan will be approved without a well-defined channel strategy.

HP partners say they are heartened by Novia's appointment. "This is a great move," said Joe Burke, vice president and general manager of midrange business for HP distributor Arrow. "He has experience in services and channels. He has always been channel-friendly."

Nevertheless, many solution providers continue to be frustrated by product shipping delays, sudden policy changes and the sharp spike in time it takes them to deal with HP issues.

Felise Katz, CEO of PKA Technologies, Suffern, N.Y., estimated that she now spends "ninety percent of her time" dealing with HP on shipping delays and other issues. "I used to spend 50 [percent] to 70 percent of my time in front of customers," she said.

Don Richie, president of Sequel Data Systems, an HP-exclusive solution provider in Austin, Texas, said HP's constant changes in strategy and poor execution with shipping delays and other issues in the enterprise business are costing partners sales growth.

"I can't imagine how much we could have grown if we didn't have to deal with these issues," he said. "Almost my entire day is spent dealing with the same set of key issues."

Pete Busam, vice president and COO of Decisive Business Systems, Pennsauken, N.J., said it is taking two to four weeks longer than normal to get products from HP Direct and twice as long to get special pricing for competitive bids. "I feel like post-merger all over again in the last three to four months," Busam said.

Moreover, major program changes are not being effectively communicated, Busam added.

For example, he said Decisive recently lost three longtime customers to Dell because HP took medical and nonprofit organizations out of the Government Education and Medical (GEM) program and moved them into HP's SMB organization, where the pricing schedule is higher.

Busam estimates he lost $50,000 in HP product sales and $15,000 in services sales recently because of the GEM change.

The HP missteps have competitors, including Sun Microsystems and IBM, attempting to grab partners and market share from HP.

Fourteen of the 24 publicly held channel companies on our watch list saw the price of their stock increase in the first quarter of 2018 while 10 recorded stock price declines. Take a look at who were the winners and who were the losers.

Ingram Micro executive vice president and Americas group president Paul Bay says rather than focus on technology and its delivery, Ingram Micro today is all about the business outcome the channel needs to deliver.